China is suspected in a record setting hack, which affected many nations over the last five years. (Source: Army Recognition)

The attack is believed to have done tremendous financial damage to those affected and given a financial boost to the attacker. (Source: McAfee)

The attacks largely target the U.S. -- which has weak cyber-security, but also targeted Asian nations, Canada, and several European nations. (Source: McAfee)

Attack "raped and pillaged" 72 organizations over 5 years

Intel Corp. (INTC) subsidiary McAfee, has just gone public [declassified report] with an incredible study into what it says is the world's biggest organized computer hack in history. The attack, which it dubs "Operation Shady RAT" (RAT stands for remote access tool), began in mid-2006 and was still ongoing at the start of this year. And unsurprisingly, China -- arguably the world's foremost cyber-superpower -- is suspected as the guilty party.

I. U.S. and Others Get "Raped and Pillaged"

McAfee's vice president of threat research, Dmitri Alperovitch, in an interview with Reuters, comments, "Companies and government agencies are getting raped and pillaged every day. They are losing economic advantage and national secrets to unscrupulous competitors. This is the biggest transfer of wealth in terms of intellectual property in history. The scale at which this is occurring is really, really frightening."

In his report he describes how a team of savvy hackers organized by a "state actor" infiltrated 72 carefully selected government and corporate systems around the world and began rapidly stealing valuable information.

Government victims included United States, Taiwan, India, South Korea, Vietnam, and Canada. A number of multinational organizations including the Association of Southeast Asian Nations (ASEAN), the International Olympic Committee (IOC), the World Anti-Doping Agency, and the United Nations. Numerous defense contractors and high-tech companies were also infiltrated in the U.S. and abroad.

In one of the highest profile attacks -- the infiltration of the United Nations' servers, the attacker gained access to systems belonging to the secretariat in Geneva in 2008 and then proceeded to lurk for two years, stealing valuable classified documents.

The longest attack appears to have targeted the Olympic committee of an unnamed South Asian nation, last 28 months. Many of the attacks were far briefer lasting only a month.

The sophisticated plot was discovered when McAfee researchers reviewing the server logs on affected U.S. contractors discovered that they were all communicating with common command-and-control servers in the unnamed attacker nation.

Mr. Alperovitch recalls the shock at this discovery, writing, "Even we were surprised by the enormous diversity of the victim organizations and were taken aback by the audacity of the perpetrators. What is happening to all this data ... is still largely an open question. However, if even a fraction of it is used to build better competing products or beat a competitor at a key negotiation (due to having stolen the other team's playbook), the loss represents a massive economic threat."

II. The Red Dragon

Unsurprisingly most suspect China, given who was attacked and the nation's long history of cyberaggression [1][2][3][4][5][6][7].

Neither China or McAfee have officially commented on this possibility. But the timing lines up remarkably.

The attacks on the IOC and Olympic committee were executed in 2008, right before the Beijing Olympics. Given China's obsessive interest in topping its foreign competitors in the medal counts, there's a clear motive for the hacks, as they could have filled in secret details on when the Olympic officials planned to conduct drug tests. In theory China could have used the data to game the system, obfuscating steroid use or other types of cheating.

The attacks also were very focused on southeast Asia. South Korea, Japan, and Taiwan -- key economic rivals of China were all targeted.

In Taiwan's case, the attack may have served a double purpose, as China views Taiwan as a rebel province and has long looked for ways to undermine it economically and politically.

Jim Lewis, a cyber expert with the Center for Strategic and International Studies, states, "Everything points to China. It could be the Russians, but there is more that points to China than Russia."

One unnamed briefed expert affirms that the classified version of the information McAfee presented points to China.

III. Preying on the Weak

If the attacks were indeed the work of the Chinese government or its contractors, it scored a massive win economically. It's unknown what if any sort of punishment can be brought against the nation, as even if the evidence points to China, in such matters it's hard to conclusively prove the origin of an attack.

Many view China's recent actions as the strong of cyberspace picking on the weak. The U.S. is among those that has been perceived as a "cyberweakling".

Vijay Mukhi, a cyber-expert based in India, states, "I'm not surprised because that's what China does, they are gradually dominating the cyberworld. I would call it child's play (for a hacker to get access to Indian government data) ... I would say we're in the stone age."

Taiwanese officials said they were not aware of being part of a broader attack, though they said they were aware of many attacks against their government servers. U.N. officials also reported being unaware of the intrusion, though they were investigating. And the government of India refused to comment on whether it was aware of the attack on its government servers.

Japan seemed the least surprised, indicating knowledge of the attack, while emphasizing the uncertainty about who was behind the attacks. They say that they are conducting and investigation and working on "finalizing some guidelines. We aim to raise the security level as a whole and build a partnership between private sector organizations where information can be shared to prevent such attacks."

McAfee has informed all 72 companies who were attacked. In its public version of the report, it redacted the affected corporate parties' names, though it mentioned what nation and what business sector they were in.

Full details of the record setting assault are still not available, and may never be available. If McAfee is to be believed, though, the financial impact is likely enormous. The attack likely puts the affected governments, including the U.S. in panic mode. The pressing question -- how to improve their security so these attacks don't happen, and how to bring to justice an attacker who wields tremendous international financial power, should a breach occur.

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Well, if all the big companies that have labor and factories in China would have the manballs and pull out China would go down in the same amount of time it went up in the last 20 years. Too bad well never see this happen.

Even without all the new toys we've always had the nuclear option. It's just that using it nowadays and on such a large number of people will make us look like douchebags. We knew bin Laden was in Afghanistan in 2001 but after 9-11 we didn't turn the place into a parking lot. Same would apply here I think.

I was just trying to convey to the OP, that while pulling all our money out of China might sound like a really great idea (and its not like we don't need it at home) doing so will have consequences worst than the status quo. It's not easy to feed 1/6 of the world's population. The money we're investing over there, a lot of it goes to buying food because China does not produces enough to feed its own population. Cut that off and they will look for alternative means. They might not attack the US directly but the nearby southeast Asian countries like Vietnam, Thailand, etc are not so lucky.

quote: Yeah but if they are built like other Chinese products, they'll never make it half way across the ocean before falling apart.

Don't underestimate the quality of Chinese products. While they used to have poor quality manufacturing, now their stuff is pretty good. Now, everything is made in China. It's incredible how quickly things have changed and our businessmen, our political leaders, helped that happen. It's incredible when you think, only 30 years ago, China was nothing but a poor 2nd world power. Now they make everything and they're the 2nd largest economy in the world.

Agreed. Every time I hear a comment about China's "sloppy quality" I get disturbed and hope that they are joking. I really do wish the top brass in the US Military don't have that mindset as well. The quickest way to defeat is underestimating your enemy.

The Japanese, much like the Germans, have an innate sense of order and are very efficient, orderly, and methodical. This makes for very efficient warriors.

They'll turn killing into a methodical process and would have no problem outsmarting and conquering less organized enemies. China gets a lot of hype nowadays but the established powers are established for a reason. China only recently passed Japan for the 2nd largest economy, and they have 10x as many people to support.

Things are slowly changing in china's favor here to. They are soon going to be the largest economy and will be able to start developing to weapon systems faster than us. War seems unlikely between to nuclear powers however, because you still risk utter destruction. Think skirmishes over allied countries like Korea, Vietnam, and Afghanistan during the cold war.

Pretty sure we had several times the GDP of Vietnam, and looked what happened there. Since when has the size of your economy had crap to do with winning a war? People keep bringing up China's economy like it's some kind of deciding factor.

America's economy wasn't so great when WWII started, but when push came to shove, we got it in gear and how!